Universal Basic Income is an important topic to consider at this point of time. This idea is gaining huge popularity as of now. This is due to the ongoing pandemic. Countries like America, Finland and other advanced European countries are considering this idea. Also, the whole campaign of an American Presidential candidate Andrew Yang for 2020 elections revolves around this idea. Although he is out of the presidential race, his UBI scheme has gained popularity. The New York Times in its article said, ‘Andrew Yang may be out, but Universal Basic Income has Legs.

The scheme is gaining popularity mainly due to idea of job losses. The idea goes like this. The rise of Automation will lead to huge job losses in the future. The unemployment rate is projected to be on the rise. The robots of future will increase productivity. Thus, human jobs will be at risk. So, this concept should be reviewed. And this is the right time to talk about it.

Let’s start with the whole concept of UBI. There are two different terms in this topic. They are ‘Universal’ and ‘Basic Income’. Let us define them one by one. Starting with ‘Basic Income’, it means the amount of money enough for every household to meet its basic demands, and this is without any other sources of income. For e.g., if the India Government announces to give 2,000 rupees per month, it cannot meet the basic needs of a household. But, if this amount is increased to 10,000 rupees, it can meet the ‘basic’ needs of a household.

Next term is ‘Universal’. It means that the government gives ‘All the citizens’ a minimum amount of money or ‘basic income’. But, many UBI schemes do not consider higher income groups. Only low income groups are generally considered.

UBI Experiments around the world:

1) One of the experiments of UBI was carried out in Finland. Finland’s Social Insurance Institution has carried out an experiment. In this experiment, a guaranteed income was given to participants for two years. The experiment started in January 2017 and ended in December 2018. The number of participants was 2000. The results were released and they were showing mixed trends. The people became happier due to UBI. But, the unemployment rate of the participants remained at same levels.

2) Another very old experiment was carried out in Canada. The experiment was called ‘Mincome’. It was designed by a group of economists. Starting from 1974, the experiment ended in 1979. An average family in Dauphin was given an annual income of 16,000 Canadian dollars ($11,700). The results of the experiment are a follows.

  • There was reduction in hospitalisation by 8.5%.
  • There was also reduction in visits to family physicians.
  • The number of adolescents completing high school also increased.
  • There was also increase in graduates in the city. In 1976, 100% of students in Dauphin enrolled for their final year of school.
  • When the experiment ended in 1979, the improvements in health and education soon returned to normal as in 1974.

3) One experiment was also conducted in Madhya Pradesh, India in 2010. Around 20 villages were chosen for testing this scheme. Out of 20, only 8 villages were given basic income. The rest of 12 villages were used as a control group. This was done to observe the differences between the two. The results of the experiment were very positive. They were as follows.

  • The villagers spent more on food and healthcare.
  • The performance of children improved by 68% comparatively.
  • The time spent by children in school increased.
  • The savings of families tripled.
  • The new businesses that were started in villages doubled.
  • The sanitation of the village improved drastically.

This shows how UBI can change the lives of people.

From all the observations above, we can now come on to benefits and drawbacks of this scheme. Let’s start with benefits:

  1. This scheme can help people get out of poverty.
  2. The mental health of population will improve as money will not be a concern.
  3. Income inequality in society will decrease drastically.
  4. As the purchasing power of the poor will increase, demand in the economy will increase.
  5. As the scheme is universal, the government need not identify the beneficiaries.
  6. As observed in the experiments, education will get a boost.
  7. Crime rates will also decrease.

This scheme also has potential drawbacks:

  1. This scheme can make people lazy. This will decrease incentive for work.
  2. There is no guarantee that the given money will be spent on right places and not on tobacco, alcohol, etc.
  3. Free cash can lead to eventual increase in rate of inflation.
  4. From where will the government bring so much money? We need to find a solution to this question.

From the observations and theories, the pros and cons are laid before us. It is time to think of the future. It is time to think about Universal Basic Income. The experiments done are not enough to conclude anything. There is a lot of work to be done in this area. So, hopefully, as a global community, we can find a solution to this problem and assure a good life for future generations.



  1. www.phys.org
  2. www.jagranjosh.com
  3. Universal Basic Income in the US and Advanced Countries – National Bureau of Economic Research, Cambridge
  4. Google Images.